Accumulate KEI Industries, target price Rs 1273: Prabhudas Lilladher

Prabhudas Lilladher has accumulate call on KEI Industries with a target price of Rs 1273. The current market price of KEI Industries Ltd. is Rs 1244.15. Time period given by analyst is one year when KEI Industries Ltd. price can reach defined target.

KEI Industries Ltd., incorporated in the year 1992, is a Mid Cap company (having a market cap of Rs 11209.12 Crore) operating in Cables sector.

KEI Industries Ltd. key Products/Revenue Segments include Cables, Income from EPC,Contracts,& Others, Stainless Steel Bars & Wires, Scrap, Traded Goods, Export Incentives, Other Operating Revenue for the year ending 31-Mar-2021.


Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 1568.94 Crore, down -12.81 % from last quarter Total Income of Rs 1799.54 Crore and up 53.77 % from last year same quarter Total Income of Rs 1020.34 Crore. Company reported net profit after tax of Rs 103.76 Crore in latest quarter.

Investment Rationale
The brokerage remains structurally positive on KEI for longer term & believe it is well placed to capture demand for wires & cables given 1) increased Infra, Industrial, Railways, Housing & Solar activity 2) wide product portfolio 3) amongst very few players having EHV cable capabilities 4) sustained momentum in dealer network sales (40% of sales, targeted to reach 50% in next couple of years) and 5) tapping into rising export opportunities. We estimate Sales/ PAT CAGR of 16%/ 23% over FY22-24E. We value the stock at 20x FY24 EPS and arrive at target price of Rs1,273 (unchanged).

Promoter/FII Holdings
Promoters held 38.02 per cent stake in the company as of 30-Jun-2022, while FIIs owned 26.49 per cent, DIIs 19.46 per cent.